More Forge workers sacked following collapse

As many as 1400 employees have now been retrenched in the wake of the Forge Group’s collapse.

“There is no money to pay employees, no work to perform,” KordaMentha restructuring’s Mark Mentha said in a statement.

Ferrier Hodgson has been appointed the voluntary administrator with KordaMentha Restructuring the receiver manager.

Accumulated debts of the collapsed group are estimated at around $500 million, with creditors expected to face a shortfall.

The largest single creditor is believed to be the ANZ Banking Group, with an estimated $200 million exposure. The bank replaced National Australia Bank as Forge's main lender in mid-2013.

On Wednesday, some 1300 Forge employees who were working on power stations and mining projects in Western Australia and Queensland, were retrenched after the principals of the construction jobs exercised contractual rights they claimed on the projects.

On Thursday, the figure exceeded 1400, since a number of employees who were in transit were not included in the original retrenchment figure. Their retrenchment followed Forge's financiers withdrawing support for the company earlier this week, with KordaMentha Restructuring appointed receiver and manager, after Forge appointed Ferrier Hodgson as the voluntary administrators.

Forge is believed to remain the operator for two power station projects - the Horizon Power project in Port Headland, Western Australia and at Diamantina, in Western Queensland, a spokesman for the receiver manager said.

Between them, these two projects have an estimated workforce of around 400, with the bulk believed to be located in Western Australia.

However, it is understood Forge has withdrawn from the Diamantina project, which is estimated to be 85 per cent completed, with some of the initial equipment now in the middle of commissioning trials.

''There is likely to be a shortfall for the lenders, at the end of the sale process,'' a source close to the situation told Fairfax Media.

According to the same source, foreign assets will be sold in an orderly fashion, which will realise some funds.

''It is still unclear how it moved from a profitable company to the mess it became," the source said.

Along with the retrenchments, offshore units in Africa, Asia and the US would now be put up for sale.

Mr Mentha said he hoped some of the retrenched employees would be employeed by new contractors to complete affected projects.

"We are working with the receiver, Ferrier Hodgson, to do whatever we can for employees at this dreadful time for them and their families," Mr Mentha said.

Additionally, affected employees would be transported back to their home towns and assisted in applying for their entitlements, he said.